When buying or selling real estate, normally a real estate agent is involved. In the past, one of the main reasons for using realtors were their access to the Multiple Listing Service (MLS) to list the property for all to see.
Nowadays the internet is the first tool people use to list, buy or sell their property, especially the “For Sale by Owner” homes. Many are turning to real estate attorneys to ‘close the deal’. The advantage of this is money.
Attorneys will charge either an hourly rate from $250-$400 hour or a flat rate which generally ranges from $700 to $2,000 depending on the complexity of the transaction. A benefit to using an attorney is the attorney has no financial interest in the sale, as well as being cost-effective.
The real estate agent typically receives 5-6% commission of the sales price for their salary. If both the seller and buyer have agents, the agents will split that fee. For example, the property sells for $200,000, the commission is $12,000 with each agent receiving $6,000. Most often the seller pays the commission.
There is a built-in conflict of interest for agents working on commission in that they have a financial interest in seeing the deal go through. Experienced, reputable agents won’t let the conflict interfere with their advice. However, less honorable agents may have their commission ahead of the client’s interest. Another drawback is that agents cannot answer any legal questions.
The consequences of not having an attorney legally answer questions can cause major headaches. Mistakes, omissions and non-disclosures can cost the client tens of thousands of dollars after the sale. An attorney will review the deed and property survey to ensure everything is to code and properly permitted. You may find out that in-law suite, shed or pool was built without permits or inspected by code enforcement. On the other hand, you may want to improve, remodel or add to your property. The attorney can tell you with certainty whether your plans are achievable. Your neighbor’s fence may be encroaching your property or you may be encroaching your neighbor’s property. These are all issues that can be handled by an attorney along with closing on the property whether buying or selling.
An attorney can usually change the legal language to void the purchase contract if needed. If an inspection comes back with serious issues, you will have an ‘out’ without monetary repercussion. Having an attorney to protect your interests and be another set of eyes is wise.
If you already have an agent, it might be wise to have an attorney review your contract, mortgage documents and closing documents before you sign. The review normally will take one to two hours of the attorney’s time and can certainly save you time, trouble and money later.
Purchasing commercial properties for a business is another complicated issue where using a real estate and business attorney would be the most beneficial for the commercial business buyer or seller.
If you are interested in discussing selling or buying a home using an attorney, rather than a realtor, contact our Denver, Colorado real estate attorney for a free consultation at 303-618-2122. Our real estate attorneys will go over the best options for your case so you can make an informed decision on whether using a lawyer or a realtor is a better option for you.
Gantenbein Law Firm is located in Denver but serves clients throughout all of Colorado. Their practice areas include Real Estate Law - including HOA Defense and Foreclosure Defense, Business Law, Estate Planning, Wills, Trusts & Probate. For more information, visit the website at www.gantenbeinlaw.com.